Sasol has again come under intense criticism from activist groups and shareholders for its climate change action plan being too vague and not targeted enough for the chemical giant to reduce emissions at its operations in the next few years. 

Sasol is one of the world leaders in technology for converting natural gas and coal to synthetic fuels and chemicals. But Sasol’s adoption of technology has come with major downside risks as its coal-to-fuels and chemicals plant in Mpumalanga’s town of Secunda is the single largest source of greenhouse gas emissions in the world. 

Sasol’s climate and decarbonisation targets include reducing its scope 1 and 2 emissions by 30% by 2030, and reaching net zero for scope 1, 2 and some scope 3 emissions by 2050. 

Scope 1 emissions are directly generated by a company through its operations; scope 2 are emissions that are racked up through a company’s purchases such as electricity, heat and cooling from a power utility or municipal source; and scope 3 emissions are indirect as they come from a company’s value or supply chain operations.

But activist organisations have trashed Sasol for failing to take adequate steps to implement its decarbonisation plan with speed, and deferring implementation of the plan until at least 2026. 

Failure to move fast, they have warned, would result in enormous financial risk to the company and further health risks, especially for the Secunda community. 

Visit Daily Maverick’s home page for more news, analysis and investigations

According to this Bloomberg report, South Africa: Living Near the World’s Biggest Emitting Plant, the high emissions generated by Sasol are causing respiratory diseases in the community.

Sasol’s board and executive management faced off with activists on Friday 2 December during an annual general meeting that went on for over five hours, where management pointed out deficiencies in the company’s climate change action plan. It was a heated AGM in which the issue of climate change dominated and Sasol board chair, Sipho Nkosi, had to postpone the lunch break twice.

Shareholder activist group, Just Share, argued that Sasol’s decarbonisation commitments and strategy failed to provide adequate details or a feasible and measurable plan that will enable Sasol to achieve its emission reduction targets. 

For example, Just Share argued that Sasol’s total emissions for scopes 1 and 2 were reduced by 5% from the previous year (in 2021) and by 7% from the company’s restated 2017 baseline. 

This, Just Share says, underscores that Sasol is slacking on its self-imposed targets to cut emissions by 30% by 2030, and reach net zero by 2050. 

The Centre for Environmental Rights has also poked similar holes in Sasol’s climate change plan.

At the AGM, Sasol group CEO Fleetwood Grobler responded to the criticism, saying Sasol was making significant progress towards meeting its decarbonisation targets and that the company was spending a lot of money to have its plan realised. 

Grobler also admitted that Sasol may not be moving fast with its climate change objectives, but asked activists and shareholders for “patience”. 

“I recognise there is impatience that we are not moving faster. Critics go so far as to accuse us of greenwashing — as if we are not serious about decarbonisation. 

“Let me be clear as I can be: Sasol does not doubt that it needs to decarbonise and transform its business model. We see tremendous opportunities for Sasol in this transition,” Grobler said. 

He said Sasol had to “self-fund decarbonisation and future low-carbon business activities from “current profit pools”. 

A starting point would be for Sasol to embrace renewable energy sources. But doing so shouldn’t negatively impact Sasol’s profits or earnings. 

Sasol had already agreed to terms to secure 600MW of renewable power, which will start coming online by 2025. By 2030, it wants to have its operations supplied with 1,200MW of renewables (mainly hydrogen energy), which will bring it close to meeting its total energy needs of about 1,500MW.

Sasol is one of the main participants in the large-scale green hydrogen developments in South Africa, with the company planning to produce hydrogen energy at its operations, especially at its Sasolburg plant in the Free State by next year.

Despite Sasol being criticised by activist groups and shareholders, the company had its climate change plan passed for a second year in a row during its AGM.

About 94% of Sasol shareholders voted in favour of the plan, while almost 6% voted against it. 

This was a non-binding advisory vote that endorsed the approach to the climate change situation at Sasol. At Sasol’s AGM in 2021, about 96.6% of Sasol shareholders voted in favour of the company’s climate action plan.

To further appease shareholders, Sasol said it has appointed a panel of climate change experts that would advise the company’s management and track its progress with implementing some of its emissions reduction targets. 

On this front, the panel will act as an adviser to management and the board. DM/BM